Good morning. My name is Sara, and I'll be your conference facilitator. I would like to welcome everyone to General Cable Corp.'s Second Quarter 2012 Earnings Conference Call. This conference call is being recorded at the request of General Cable. Should you have any objections, you may disconnect at this time. [Operator Instructions] Thank you, General Cable, you may begin your conference.

Many of you have already seen a copy of our press release from last night. For those of you who have not, it is available on First Call and on our website at generalcable.com. Today's call will be accompanied by a slide presentation also available on our website. If you have not downloaded a copy, we recommend that you do so as we will refer to the presentation throughout our prepared remarks today.

The format of today's call will first be an overview by Brian Robinson of our second quarter. Secondly, Greg Kenny will provide comments on the company's third quarter 2012 outlook and full year business trends, followed by a question-and-answer period.

Before we get started, I wanted to call your attention to our Safe Harbor provisions regarding forward-looking statements and company-defined non-GAAP financial measures as defined on Slide #2, as we may refer to adjusted operating income and adjusted EBITDA in today's call.

To begin, please turn to Slide #5, where we have included a reconciliation of our previously communicated outlook provided on May 1.

With that, I will now turn the call over to Brian Robinson. Brian?

Brian J. Robinson

Thank you, Len. Good morning. We are pleased to report adjusted operating income and adjusted EPS were within our guidance range for the second quarter as each of our segments reported sequentially stronger results. Our businesses in North America and ROW were a source of stability during the second quarter, and in Europe, we continue to help ourselves despite an increasingly more challenging macroeconomic environment.

Metal pounds sold for the second quarter increased 2% sequentially and 5% year-over-year but were below our guidance range. Our previously communicated demand expectations for the second quarter failed to materialize due to the impact of the economic uncertainty in Europe and industrial slowdown stalling demand for wire and cable products in North America and the impact of declining metal prices on the buying behavior of electrical distributors and OEM broad customers.

Quarterly average copper and aluminum prices drifted lower for the second quarter, declining 6% and 7%, respectively from our previous communication.

Otherwise, as you can see on Slide 5, inventory quantity movements and the effective tax rate were generally consistent with our expectations for the second quarter.

On Slide #6, we have provided commentary explaining our second quarter results compared to the first quarter of 2012. The increase in global unit volume of 2% sequentially, relatively stable pricing in North America and ROW, and a favorable geographic mix in Europe helped to lift the top line more than 3% sequentially despite the impact of declining metal prices. In Europe, stronger demand for electric utility cables in France and the Mediterranean partially replaced the significant volume at very weak pricing levels reported in Spain during the first quarter.

Gross profit and adjusted operating income performance in the second quarter principally reflect the improved performance of the company's telephone and electric utility businesses in North America, strong global aerial transmission project activity, improving domestic conditions in Thailand, mining activity in Chile and ongoing grid investment in France.

Other expense for the second quarter of $13.5 million reflects the impact of $10.2 million of mark-to-market accounting losses on economic hedges, which are used to manage currency and commodity risk on our project businesses globally, and $3.3 million of transactional currency losses. Given the numerous currencies in which we transact business around the world and the currency volatility experienced during second quarter, we are pleased with the effectiveness of our hedging program as we reported foreign currency transactional losses consistent with historical norms during the quarter.

On the next 3 pages, Slide 7, 8 and 9, we have provided segment information for your reference. First in North America, excluding metal pounds attributable to our telephone and electric utility businesses, volume was up 1% sequentially as industrial and networking demand improved marginally compared to the first quarter. Specialty cables, particularly those used in natural resource extraction, continue to be a source of stability.

Year-over-year, excluding metal pounds attributable to our telephone and electric utility businesses, volume was up 4%, as stronger demand for industrial and specialty cables more than offset weaker demand in the company's other North American businesses. Sequentially, second quarter operating income of $38.7 million improved, principally due to the strong performance of the company's telephone and electric utility [indiscernible] specialty cables businesses.

In ROW, excluding aerial transmission product shipments in Brazil, sequential demand driven by electrical infrastructure and construction-related activity in Latin America, as well as the impact of the ongoing recovery in Thailand, were more than offset by Rob Mill customers and distributors postponing orders due to declining metal prices. We also experienced delays in aerial transmission projects in Brazil and high-voltage cable projects for export from Thailand during the second quarter.

Sequentially, second quarter operating income of $29.3 million increased, principally due to improving conditions in Thailand following the severe flooding experienced at the end of last year coupled with strong construction activity in Venezuela and the Philippines and mining activity in Chile.

In Europe and Mediterranean, volume increased 4% sequentially as demand improved from medium voltage cables in France and aluminum-based electric utility cables in the Mediterranean. Sequentially, adjusted operating income increased to $10.7 million during the second quarter. This improvement is principally due to the strong demand for electric utility products in France and the Mediterranean, as greater liability work and investments advanced during the second quarter.

We experienced typical intermittent delays in shipping a project activity and milestones during the quarter in our submarine and land-based turnkey project business. These projects are highly complex and movement of project activity between quarters is typical. Project activity for the full year remains on track, though green energy initiatives are broadly coming under some pressures due to public budget constraints. At the end of the second quarter, the company maintained a $650 million backlog for submarine and land-based high-voltage and extra-high voltage cable projects.

Finally, moving to Slide 10, our credit profile remains strong with the financial flexibility to fund our working capital requirements and capitalize on global opportunities. We remain focused on our capital structure and intend to maintain the financial flexibility and liquidity in the business in order to fund working capital requirements, as well as the recently announced transactions.

The company intends to add the acquired North American assets of Alcan Cable to its existing U.S. and Canadian asset-based revolver, increasing the size of the facility, thereby retaining an equivalent level of liquidity in the business. At the end of the second quarter, the company had over $1.2 billion of excess liquidity across the globe.

In addition, the company has approximately 1/2 of its $125 million share repurchase program authorization outstanding following the $62.5 million or 5% of common shares outstanding we've purchased during the fourth quarter of 2011. No shares were purchased in the second quarter.

With those comments, I'll turn the call over to Greg for a recap of our third quarter expectations and full year business trends, which are summarized on Slides 12 through 15. Greg?

Gregory B. Kenny

Thank you, Brian, and good morning, everyone. Revenues for the third quarter of 2012 are expected to be in the range of a hundred -- $1.43 billion to $1.48 billion on flat to slightly lower volume sequentially. Adjusted operating income is expected to be in the range of $65 million to $75 million. Adjusted earnings per share is expected to be in the range of $0.60 to $0.70 per share.

For our third quarter outlook, stronger submarine and land-based turnkey project activity, mining and construction activity in Central and South America and ongoing rebuilding in Thailand are expected to be more than offset by normal seasonal patterns in North America and Europe and planned seasonal inventory quantity reduction globally.

The positive momentum experienced in the early part of the year has stalled a bit as economies around the world are slowing signs -- are showing signs of weakness and metal pricing remains extremely volatile. As a result, and as summarized on Slide 13, we are lowering our full year volume guidance as we now expect growth in the range of 2% to 4% year-over-year. And we're also lowering our range of expectations for adjusted operating income for the full year of 2012 to $260 million to $280 million. This range represents an increase of 5% to 13% as compared to 2011.

While we have revised our volume earnings growth expectations for 2012, we reaffirm our previously communicated guidance with respect to the annual effective tax rate, operating cash flows and capital spending. As you know, movements in metal prices and demand volatility have a material impact on our working capital requirements and operating cash flows.

Overall, we are pleased with a solid first half of 2012 as adjusted operating income and volume increased sequentially, 39% and 5%, respectively as compared to second half 2011. However, as we have communicated for a number of quarters, we continue to experience a slow recovery in important end markets as there remains a great deal of uncertainty around growth and prospects globally.

Our view of the full year 2012 is cautious as our visibility has become more limited and raw material cost inputs and turnkey project timing continue to be volatile.

Over the last weeks, we have noticed a slowing of incoming order rates for products tied to OEM, industrial and IT spending in North America. On balance, our updated full year view of 2012 implies a relatively stable second half of 2012 as compared to the first half with some risks to the downside. This view reflects seasonal adjusted stability in our base business globally, complemented by areas of strength in cable, demand tied to aerial transmission, oil and gas extraction and electrical infrastructure, mining and construction in emerging markets, as well as stronger submarine and land-based project activity.

We're very focused on daily execution, working capital management and continuous improvement. We also remain focused in closing and integrating the recently announced acquisitions.

In the second quarter, we announced the signing of definitive purchase agreements to acquire Alcan Cable and a majority interest in Procables of Colombia. We continue to expect the Alcan acquisition will close during the second half of the year. Under the terms of the definitive purchase agreement, there are separate closings for the North American and Chinese businesses, contingent in various closing conditions. The primary closing condition is in receipt of the necessary regulatory approval.

In North America, we made competition filings in the U.S. and Canada and we've already received approval in the United States. In Canada, the statutory waiting period expired on July 30, but we are waiting for the Canadian Competition Bureau to issue its formal approval of the transaction prior to closing. We expect the Canadian Competition Bureau to complete its review of the transaction by mid-August.

In China, we've made the necessary regulatory filing and that review process is ongoing. Similarly, we expect to close the Procables acquisition during the second half of the year. In Colombia, we've made the necessary regulatory filing and that review process is ongoing.

Together, these companies are expected to contribute $750 million to $850 million of revenues annually at current metal prices. Both businesses are expected to be accretive on a full year basis.

That concludes our prepared remarks. I'll now turn the call back over to the operator who'll assist us in taking your questions. Operator?

Just hopefully trying to get a breakdown of the 2% to 4% volume growth now maybe per region for 2012, and then maybe even on that just a little bit of color in terms of how we should expect the back half as well.

Gregory B. Kenny

Yes, Shawn. Europe, with some of our project activity and our efforts to export out of Spain, despite the difficulties over there, I think we may be bottoming and with a slight bit of pickup as these projects come through. The U.S., the big issues really are -- the wind hasn't been reapproved, that is, the wind tax incentive, so the fourth quarter is a question mark whether -- and that may not get tackled until the fourth quarter, but in the U.S., our transmission has run strong. I would say the other businesses' early cycle kind of stuff is at best rolling sideways as certainly the growth or increase has stalled out, we saw that really going through the second quarter. The rest of world, again, those markets are clearly linked to what's happening in the rest of the world, but broadly, we see a couple percent growth in the rest of the world, in the second half of the year versus prior year, and some upside to the first half, it really -- the timing of the big transmission projects has a tendency to wiggle that around. But overall, I would say, in that 2% to 4% range, that's -- basically, it's rolling sideways with probably Europe showing a little more strength, and ROW, really, is fairly metal-intensive businesses, and that's susceptible to push in and out. I guess I have a tendency to look at the early cycle U.S. businesses, and that's at best sideways, which says the economy's virtually stopped expanding.

Shawn M. Harrison - Longbow Research LLC

Okay, that's great. And then just maybe 2 comments or questions regarding kind of M&A. Post the Alcan transaction, what would you expect your exposure to be to U.S. res construction? And then also, how do the acquisitions play into your view for share repurchase activity in the back half of the year?

Gregory B. Kenny

Well U.S. housing, which is maybe bottoming and slightly picking up, affects everything we do in one way or another. Clearly, we don't have a lot of cable inside the house, though some of the sound security is there, but to the extent there's housing, that affects -- Alcan brings aluminum building wire that would be used in residential and nonresi construction. And of course, the housing ties to the utility spend for both telephone cable and electrical cable. So we're encouraged because it will pull a lot along. There's also portable power used on the job site, there's high-end data cable in a home, often can be, sound security. So I would say, housing touches most of what we do, though some of it is second order, but the housing bottoming is a good thing from our perspective. To the share repurchase, we didn't purchase any in the last quarter. We continue to have open authority to buy more, and I would say we're constantly looking at strategic opportunity versus buying something we know well, which is General Cable, and you saw us buy 5% of the company a couple of quarters back, and we'll continue to keep a very sharp eye on that opportunity in context to -- of other things that we might do.

Brian J. Robinson

And Shawn, so it's Brian here. We also -- as we said in the release, and -- is that we will -- our intention to add the U.S. and Canadian Alcan Cable assets into the U.S. and Canadian revolver and upsize that facility to retain the liquidity in the business. So that's -- we're deep into that process and so that will retain our liquidity, retains the -- our ability to deploy capital in a number of different ways.

Operator

Your next question comes from Rich Wesolowski of Sidoti & Company.

Richard Wesolowski - Sidoti & Company, LLC

I don't think I've heard management focus so much on utility spending and grid reliability in France as a budding [ph] European business. Has there been a change in spending? Is this company successfully redirecting product and is it sustainable?

Gregory B. Kenny

The EDF has been a leader among transmission companies in the world and we have a important position there as I think we've been building over the years, part of the French answer has -- to slowdown has been to do some spending internally on their grid, and I would say it's stayed relatively healthy through the last years and we continue to develop our LAN DC cables, we had cables for some title pools, et cetera and some of the interconnectors. So it's partially us with a long and growing position with EDF, and I would say that's been buoyed by sort of French interest. It's their form of stimulus, I guess. But we haven't seen it take off in this U.S., and so the stimulus, it's just been relatively strong in the crisis. As you know, the French nuclear reactors are supporting Germany and other places, so the grid interconnectors have been important. And France did not have a housing bubble that we saw elsewhere in Europe. So it's also -- out of France, we're doing global projects, high-voltage turnkey projects, which again have some lumpiness in terms of percentage of completion, but that has been a pretty good business for us, and we're working all over the world using French know-how and technology in doing a lot of work in the Middle East, for example, and elsewhere. So when we talk about France, the product source there was sold globally. So it's not just a EDF story.

Brian J. Robinson

Yes, and one other piece to that would be the cost containment programs in France. I think we've done a very good job with our lean systems, and that has been a multi-year process. And we're continuing to receive the benefits from that -- the focus on cost control and cost down.

Richard Wesolowski - Sidoti & Company, LLC

Secondly, with economies weak and copper and metals volatile, your business has become seemingly more difficult to manage and predict. In your minds, does that suggest the company should carry less debt than has been common for yourselves and for the rest of the industry over the last few years? And will debt reduction at all be a focus after the Procables and the Alcan acquisitions have been completed?

Brian J. Robinson

Yes, Rich, I think it's -- the working capital management is something we clearly understand, and that's a large lever in terms of liberating cash. And I think we're very good, but we continue to focus on the working capital management. We've invested in the first half of the year and we see most, if not all, of that coming out in the second half of the year. So the additions of Alcan Cable, which is -- and Procables, which are both operations that generally are fairly well run, so -- very well run, I think to be -- to clarify. So there will be, I think, continuing opportunities, but I don't see it as a massive opportunity that there's fundamentally something broken there. So I would really say it's -- it creates a larger opportunity set around best practices, but ultimately, running the business, generating the free cash flow, we're focused on that. And ratcheting down the capital spending is also something that we're focused on spending for most of our businesses below depreciation, but we're investing in certain areas as we talked about the oil and gas, and we've had some final spending or -- on some of our installation assets in Europe.

Operator

Your next question comes from Tony Kure of KeyBanc.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Just had a question on the backlog. You mentioned in the press release, the backlog is around $650 million for submarine and land-based turnkey cable projects. That, I think, is the same number that was in the first quarter press release, which said it was static with the year-end 2011. So I guess, given that, and it's fair to assume that you have sold some of that or revenued some of those projects, did you -- have you been booking additional business to sort of backfill and keep that backlog steady? Maybe you can just speak to that.

Brian J. Robinson

Yes. We're, as you well -- as you know, the -- these are big complex projects in the North Sea. The Germans have been trying to figure out, there's a lot of pushing and shoving in terms of -- are they ready? Do they have the transmission lines to bring the power down? Where do liabilities begin and end among the different wind park operators versus the people riding [ph] the so-called export cable, the connection to the land. So we have stopped coming in and out. As time goes on, we continue to book projects, but I would say that while the Germans and others are committed to win, we keep an eye on the public subsidy and there's a big backlog, but the stuff moves around. It's complex. So there's a lot of public policy debate, which you've probably seen in the papers, in Germany over getting the government more deeply committed to how -- orchestrate this all happening. So our backlog's there, we're continuing to deliver, but it stopped growing in the quarter but we bid plenty of jobs and again, those are turnkey land, turnkey submarine communications and also turnkey power, which could involve the wind park itself or could involve bringing the cable to land. So we've invested in the area, and right now, we're working on harvesting that investment. But again, with percentage of completion accounting, the revenue recognition can be lumpy.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Okay. So I guess to put that in terms of your guidance then, with third quarter operating income guidance at the midpoint around $70 million, I think, and then the midpoint of your full year is around $270 million. So does that imply the fourth quarter to balance that out would be better? Are you -- is the expectation or is the implication there that the fourth quarter is going to be better seasonally than is normal?

Gregory B. Kenny

Well, rest of the world, again, there's the turnkey projects, which -- the submarine side, we expect to kick in stronger in the second half. And then rest of world typically has a somewhat a stronger second half of the year than the Northern Hemisphere. So I'll let Brian embellish.

Brian J. Robinson

Yes, Tony, I would say, in our traditional base businesses, I think we see -- you heard us talk a little bit earlier about what we're seeing in some of the industrial businesses in North America, for example. But I think in the base businesses, we're expecting somewhat of a seasonal normal -- a normal seasonal trend. And then offsetting that would be our viewpoints around our project business and potentially sort of the run rate and the continuing improvement in our Thai business is maybe something that helps to, let's say, offset what we'll see -- what has traditionally been seasonality in Q4.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Okay. And then, I guess, just wrapping up, with the full year EBIT guidance, does that assume that there will be any cancellations? I mean, it sounds like there's some question or risk to some of these projects ongoing in Europe. Does that assume that there will be cancellations there, or do you have a little bit more caution factored into your operating income guidance number? And then, are there penalties, if there were, if these projects were to be canceled that compensate you?

Brian J. Robinson

Yes. I mean, the -- we're looking at projects that get pushed out, projects that could be canceled, waiting for different conditions, the contracts are written that you -- under certain conditions, you can make claims for cancellation, and we would go ahead and make claims under those contracts as you reserved assets. So we -- our guidance would have a view as to what the timing is likely to be on things, whether they're -- whether they're incoming order rates, as well as cancellation, we can see what we booked and we can also see what likely delivery is. But the North Sea is generally behind, as you know, there's a lack of some of the converters and installation, everything is at a pinch. And then within Germany, there's a push and shove over liabilities in terms of who's ready for to receive the power and where is it going. So this is a big complex thing. So it moves weekly, Tony, and we would have that view. And yes, if we had a cancellation after reserving crews, we would vigorously seek arbitration or other means to enforce our rights.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Great. And I'm sorry, just sneak one more question in. Just on pricing with copper coming down sequentially into the quarter. Did pricing get incrementally more competitive with the decline in metals?

Brian J. Robinson

I think the metals, we're caught as you know, selling this product that we made at a higher copper cost and the market has been falling, and we've talked about worldwide distributors, some of them go hand -- go a little thinner on inventory or people who are going to book projects sort of watch the market when the market -- copper is falling, thinking that prices could be lower, and then as you know in the last month, it started to bottom and come up a little bit. Copper has moved up about a dime since the end of June. But the -- we get paid on a net added value, and you can think about that either on a LIFO basis or on an average cost basis, but I would say pricing is always competitive. We continue to pull costs out, and I think some of our cost-out helped us in the quarter. And as you know, we've been deep into it in Europe, and we have continuous improvement going on throughout the company on a global basis. But I wouldn't say pricing has -- it's always fiercely competitive, but I wouldn't say it's gotten worse. We saw more pauses waiting for, probably, the copper market to stabilize for those parts of the market that are more distribution-oriented. The utilities themselves have formulaic escalators and deescalators, so they order when they're ready to order.

Operator

Your next question comes from Jack Stimac of BB&T Capital Markets.

Jack C. Stimac - BB&T Capital Markets, Research Division

I guess following up on that, maybe you could walk us through some of the, maybe your gross profit assumptions going into the back half, just with maybe kind of how we should think about the price cost. I think you'd outlined an inventory reduction, maybe how big that will be and the impact. And then, maybe the impact of mix going forward.

Brian J. Robinson

Yes, Jack, I guess without getting into the real details here, I'd say, coming back to what we were saying earlier, I think in the second half, the things that we're expecting on the, let's say, on the positive side or around the project business and some of the businesses in ROW, which we specifically mentioned, the Thai business, we -- from a working capital perspective, one, we mentioned that we're -- we will -- were targeted to take out about $30 million of inventory in Q3, and that will have an impact on -- and all things being equal, has an impact on absorption and sequentially, can hurt the results. But again everyday, we're watching, moving copper, which has -- which can have an impact on us. We're pleased to report in the second quarter, despite the fallen copper prices, that we were able to manage the business through to what we think is an -- in our mind, a nice bottom line result. So I guess that's the only way I'd summarize that. I wouldn't go into anymore detail on this.

Gregory B. Kenny

Yes, we haven't really put in an assumption of a pricing decline. It's volume and mix and obviously, cost recovery, or cost efficiency or continuous improvement. But we're not actually calling a step down in that. The pricing in Spain is tough enough that it's hard to make money, but that's -- eventually, people go away or they shutter capacity, but it's, I would say, more of the same in our view right now, in terms of gross margins.

Jack C. Stimac - BB&T Capital Markets, Research Division

Okay. And then maybe on kind of the operating expense line. If we look sequentially, I think volume was up 2%, but SG&A was up closer to 5%. And I know you had a little bit of M&A. But what kind of runway -- run rate should we think about that looking right for the rest of the year? I mean, is it going to stay in kind of this elevated level or should it kind of revert to a lower, more normal level?

Brian J. Robinson

Yes, I would say, we've been saying that it's $95 million plus or minus, so I think that's the right way just to model it. Just to clarify, as you know we, on a GAAP basis, we reported $104 million, but that includes a $600 million pension charge in there. So $90 million for the quarter, plus or minus $1 million of ongoing expenses related to M&A activity, so -- and then, there's lots of puts and takes around the world. So I would -- again, I would say -- I would guide towards that $95 million plus or minus. We, as you know, are continuing to focus on the cost, obviously, in [indiscernible] in our Europe and Med business where we're going at it very hard. So that's how I would frame it.

Jack C. Stimac - BB&T Capital Markets, Research Division

Okay. And then lastly for me, just as you think about the acquisitions you've made and you kind of updated us a little bit on the expectations, just with the movements and that all and just kind of where we are in the world economy, has your outlook on these acquisitions changed at all? I mean, have the accretion assumptions been altered at all because of what's been going on lately?

Gregory B. Kenny

Well, I wouldn't say our view has changed. Clearly, there's more pause in the last months, but there's strong synergies. In the case of Alcan and best practice leveraging in the U.S., I continue to believe is in the midst of a recovery in construction or a bottoming certainly, which will help parts of their business. We talked about the transmission business being spiky but generally, in an uptrend over time on the grid in the U.S. And then Colombia continues to do very well as an economy. So I remain encouraged and enthusiastic about them and can't wait to get them completed. We're also, on an earlier question, we're continuing to harvest our work in India where we built a new facility, which is just coming online, and you can see the grid issues they have. Again, how they get resolved, that takes time and money and other things. But of course, Mexico and Peru, so -- and then getting a return on our investment in the submarine cable area that is famed in oil and gas and wind, alternative energy, up in Germany, are things we're concentrating on. So I like our hand, and yes, it is choppy and for all the stuff you read in the headlines, but these acquisitions should work well for us.

Operator

Your next question comes from Jeff Beach of Stifel, Nicolaus.

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Greg and Brian, in the second quarter, you had about, by my calculation a $14 million metal pound shortfall from your guidance, give or take, in a range. Since volume is so important, could you give us an estimate of, in millions of pounds, roughly, of how much represented delayed projects in Brazil, Thailand and some of the projects that you mentioned in Europe? And then give us a rough guess, which I know is tough, but a rough guess on what could have been a range of delayed purchases from distributors and some of the Rob Mill customers from falling copper prices versus a shortfall from actual economic weakness.

Brian J. Robinson

Yes, there is a lot in there, Jeff. That's -- but taking maybe a best estimate out of your -- the pounds miss that you mentioned, a lot of that is in the metal-intensive businesses, so -- and if we put together by region, I don't know, maybe 80% of it in North America and the ROW businesses. Remember on the project side, while the volume -- the metals matter, there's also the service components. So there's a little less impact there. So we really, again, back to -- I'd say the 80% of that, plus or minus, is in ROW and the North American businesses. If we try to bifurcate it further, that gets a little harder in terms of how much is generally weakness. As we mentioned, we saw a slight improvement, say, in North America on some of the OEM in the early cycle businesses. So in that -- so from that perspective, those businesses are rolling over a bit. But beyond that, I couldn't parse it further.

Gregory B. Kenny

Yes, North America, Brian, is -- the bulk of our miss was in the 2 areas, not Europe, which we already -- which we had -- obviously, is an area in some turmoil. But Europe was more or less in the zip code of where we thought they'd be. And then the U.S., its, I would say, general weakness versus our April expectations in industrial specialty. The Datacom was a bit softer but not as much as the others. Telephone cable was softer than expected. In ROW, it was mostly -- in most areas, except the Philippines was good and -- but generally, the metal-intensive business in ROW, including transmission, miss. So I would say, 80%, 90% of the miss was North America and ROW versus our expectation. And Europe was more or less where we thought they would be. A lot of it -- as you know, we sell rod out of ROW, and if copper's falling or a customer could say "I'll wait until July, take delivery, let's see where she bottoms" as there's different price setting mechanisms. So you can get into unit volume quickly if you're still talking about selling truckloads of rod, which we do at a few locations.

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

As a follow-up question, so far, a lot of the companies that I follow that have good industrial exposure and a lot of that industrial exposure is into the energy, mining, other markets have shown some pretty good strength. What -- can you describe what you see happening -- I thought energy capital markets, for example, were still growing at a reasonably good pace. What might make the sale of cables into those markets different than some other products?

Gregory B. Kenny

Well, Jeff, you're asking versus my expectations, you weren't asking about, like again, we can maybe -- this is fairly detailed. You'd need to look at where industrial was, for example, versus the prior quarter or versus prior year, so I thought you were asking about what we -- what actually was the areas that missed from what we expected, but they still may be relatively better or worse than where they were the prior quarter or prior year. But no, we should -- I try to read the same things you're reading, and I guess people feel okay and we feel okay about it. We don't see it necessarily accelerating right now, Jeff. But it's -- are you speaking now of U.S. industrial demand, is that where you're going?

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Yes, or North America, yes.

Brian J. Robinson

I think that the -- I'd give -- I'd break it out a little bit, to say, for example, in the mining or in gas sectors for our cable demand businesses, those businesses remain -- as we said, they're sources of stability and growing. And again, that's one where -- it's an area that we've talked about for almost a couple of years now. I think where we've seen -- where we'd say that we've seen more of the softness would be on the base industrial cables that are more, for lack of a better word, more standard cables going through the industrial distribution call it.

Just a few housekeeping questions. Brian, I was hoping you could help us with sort of a run rate for interest expense as these acquisitions close.

Brian J. Robinson

Yes, Brent, I would say it's -- we'll principally borrow on the U.S. revolver, so it's probably a couple of points of interest on a couple hundred million dollars, so call it $4 million incremental on the interest expense.

Brent Thielman - D.A. Davidson & Co., Research Division

Got you. And then, I know you guys provided sales associated with the acquisitions. I was hoping you could provide sort of what you think how the incremental volumes will be on an annual basis?

Brian J. Robinson

I don't remember we would give the volumes, I think what we would say is maybe we'd look at it at a different way, which is to say that the business will broadly be about half copper and half aluminum.

Gregory B. Kenny

As the overall company.

Brian J. Robinson

Excuse me, as the overall company. So that's -- as you know, today, we tend to be about 2/3 copper, about 1/3 aluminum, but that varies a bit. Yes, about that, so I guess that's what I'd provide at this time, Brent.

Gregory B. Kenny

I don't want to get into how many million pounds, Alcan or Procables, so we don't own those companies yet. And we'll decide how we'll talk about it once we own them. But we'll be at a 50-50 copper to aluminum approximately mix of conductor weight worldwide once they're closed.

Brent Thielman - D.A. Davidson & Co., Research Division

Okay, fair enough. And then, lastly, and I'm making some assumptions here. But I guess, how long before you think you can get kind of the margins associated with those business kind of consistent with your own business?

Gregory B. Kenny

We -- the marketplace sets the price. We have industrial synergies with both companies, but I don't want to put a stake in the ground. We said they'd be accretive in the first year of operation.

Brian J. Robinson

Right. Brent, remember -- and so we've talked about this as really -- it's similar to our own operating margin in North America over time. So I think, clearly some of this will be predicated upon end market demand. But as Greg said earlier, we feel very, very good about these transactions. We may not get it exactly right in a single quarter in terms of the thing being hugely accretive, but I think, again, we, as we said, we think that the businesses will be accretive in the first full year of operation, and over time, we can get those to our own average.

Operator

There are no further questions queued up at this time. I'll turn the call back over to the presenters for closing remarks.

Len Texter

Thanks for joining us this morning. That concludes our conference call. A replay of this call will be available on our website later today. We appreciate your continued interest in General Cable.

Operator

This concludes today's conference call. You may now disconnect.

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